Following a consultative governance review, the Dubai government amended the Dubai International Financial Centre (DIFC) law. This is the first modification of the law enacted in 2004, which established the DIFC as the first financial free zone in the UAE. The amended law is seen as more conducive to dynamic growth of the banking and financial sectors in Dubai, both of which develop in and through the DIFC.

The revision introduces more transparency into the working of the centre, clarifies responsibilities between the three DIFC bodies-the DIFC Authority (DIFCA), the Dubai Financial Services Authority (DFSA) and the DIFC Courts-and specifies relations between the centre and other Dubai government entities. It also introduces some of the most recent best practices and good governance concepts into the legal framework of the institution.

The law confirms the independence of the three institutions making up the DIFC. It also creates the Higher Board, a body on which the DIFCA, the DFSA and the DIFC Courts will be represented. The board's main mandate will be to monitor the co-operation of these bodies, while respecting their independence, and ensuring that their activities are in line with the overall purpose of the institution. The board will be headed by the president of the DIFC and the deputy ruler of Dubai, Sheikh Maktoum bin Mohammed bin Rashid al-Maktoum, and will meet at least twice every year.

The amended legislation includes provisions regarding the appointment of the governor of the DIFC. The holder of the position would be appointed by the ruler of Dubai, acting on a proposal from the president of the DIFC, for a renewable term of four years.

According to the new law, the DIFCA will be in charge of establishing and regulating the DIFC's payments system. It will co-ordinate with the Central Bank of the UAE in its role as a supervisor, regulator, operator and user of the wholesale, large-volume payment system. It will also be responsible for the foreign-currency clearing and settlement of payments, including the real-time gross settlement (RTGS) system in the DIFC.

The new law specifies the application of Dubai's legal, governmental and financial regulations to the DIFC. The lack of clarity in this area has been criticised previously, and was highlighted during the Dubai financial crisis. After the onset of the emirate's debt troubles, the shortcomings of the DIFC's systemic solutions became apparent. As several restructurings were handled by the centre and a number of cases were brought before the DIFC Courts, the authorities have taken the decision to set in motion a consultation and to improve the legal set up. The amended law comes into force with immediate effect.